Dealing with late payments used to be a constant source of stress. I finally implemented automatic late fees in my invoicing system last month.
What a game changer! Now, most clients pay on time, and those who don’t at least cover the fees. Wish I had done this sooner.
Make sure your contracts spell out the late fee terms upfront. I put it right in the work agreement so there’s no surprise later. Had a client try to dispute a late fee once because they claimed they never agreed to it.
QuickBooks makes the setup pretty straightforward if you’re using that. Just go into your invoice settings and turn on automatic late fees.
Best part is once it’s automated, you don’t have to remember to add fees manually. The system does it and keeps track of everything for you.
Been charging late fees for about three years now. Started at 1.5% per month but found that was too low to actually motivate anyone.
Bumped it up to 3% and suddenly people started paying attention. The key thing I learned is you have to put it right on the invoice in bold text, not buried in terms somewhere.
I also send a reminder email 5 days before the due date now. Sounds like extra work but it actually cut my late payments in half. Most people just forget, they’re not trying to stiff you.
One warning though - make sure your state allows whatever percentage you want to charge. Some places have caps on late fees.
I just ask for payment upfront on most jobs.
Automatic late fees can backfire. I’ve had clients react poorly to surprise charges, even when it was in the contract.
Now, I just include potential delays in my rates. If someone pays late, I don’t work with them again. This avoids fee disputes.
Never bothered with late fees. Too much paperwork for small jobs.
The psychological effect is real. Once clients know there’s a penalty, they suddenly find ways to pay faster.
I went a different route though. Instead of late fees, I offer early payment discounts:
Same result but clients feel rewarded instead of punished. Plus you avoid any awkward conversations about penalty charges.
The discount comes out of what would have been my “late fee buffer” anyway. And honestly, getting paid 20 days early with a small discount beats chasing money for months.